Theresa May came to office pledging a bright future for Britain by tackling inequality, greed in the boardroom, an industrial strategy and an end to austerity.
She leaves office with most of this undone, diverted by the wastefulness of Brexit politics.
Her time in office is a reminder of how little control politicians have over economic destiny. Growth has chugged along in spite of Brexit uncertainty, the budget deficit has fallen at a faster rate than anyone forecast and employment is more robust than at any time since the 1970s. Consumers have shrugged aside carnage on the High Street, and retail sales climbed by 1.8 per cent in the three months to April.
A bad taste: Theresa May came to office pledging a bright future for Britain
The performance of the economy has been helped by the Bank of England’s willingness to maintain an ultra-low bank rate of 0.75 per cent when it might have been expected to rise.
Firms have chosen to invest in labour rather than the technology, plant and machinery which more efficiently drive productivity and faster growth.
The Government’s Industrial Strategy Council, headed by Bank of England chief economist Andy Haldane, regards it as critical to close the performance gap between Britain’s best global firms and those that are badly run. The sad truth, however, is the Tories have been hopeless in handling industry.
A better Department for Business, Energy & Industrial Strategy would have understood the consequence of selling the Scunthorpe steel facility, grandly renamed British Steel, to an outfit with as mixed a record as Greybull, which the more respectable end of the private equity space is anxious to disown.
Greybull looked after itself and executives while driving the steel firm into the hands of the Official Receiver.
Last year directors extracted £3.2m in pay from the company, up from £2.7m in 2017. Auditors Deloitte, who failed to blow the whistle until the last, collected £475,000 in direct fees from British Steel and its parent.
British Steel’s ultimate controlling company Olympus Steel 2 Limited is owed two years of accrued interest worth £34m.
Whitehall is obsessed by EU regulations governing state subsidies, albeit that these are stipulations regularly ignored on the Continent.
It should not have been beyond the wit of a more engaged government to knit together a consortium of interested parties, including big steel users such as rail and defence companies, the employees and bankers, to have kept Scunthorpe afloat without turning to ruthless financiers.
The idea being floated that the Chinese might be the answer is wrong both on economic security grounds and because of Beijing’s conflict of interest as a cut-price steel producer.
What is required is more engaged government. The Industrial Strategy sets a target of 2.4 per cent of national output to be spent by government supporting R&D.
A freshened Tory administration should drive this goal with the same enthusiasm and (some might say misplaced) dedication as David Cameron put behind foreign aid.
The economy and industrial policy have been on autonomous drive for too long.
Hitting pay dirt
Fintech and payment systems is an area where Britain excels. The staggering rise in the value of Worldpay, recently sold for £26 billion, has been well rehearsed. Earlier this week Canadian payments technology company Nuvei Corp bought British electronics provider Safecharge International that works for the betting industry and others in an all-cash deal valued at £683.4m.
Another recent significant deal took place in the Tea Building in hipster Shoreditch where electronic payments outfit Transferwise raised £225m in fresh capital in a transaction which placed a value of £2.7 billion on the firm. It dispatches payments through 1,600 different routes at fees and speeds which the banks can only dream of. Now it is on a path to a stock market float.
Meanwhile, consumer friendly online bank Monzo, much liked for its bright pink, no foreign exchange commission cards is expanding exponentially. It is seeking a 100,000 sq ft site in the heart of the City for its operations having recently created 300 jobs in Cardiff.
As predicted by Bank of England the UK is a leader in payments innovation. The danger is that technology born and bred in the UK, on the back of our research universities and expertise in money, ends in overseas hands because of neglect in government.